Odaily, citing Bloomberg, reported that a retail investor in GameStop has filed a class-action lawsuit in the Delaware Chancery Court. The lawsuit seeks to block a shareholder vote on a compensation package for Chief Executive Officer Ryan Cohen valued at $3.5 billion. The plaintiff is asking the court to prevent the vote from moving forward until shareholders receive what the complaint describes as proper information disclosure.
Complaint Focuses on Voting Procedures and Proxy Materials
According to the lawsuit, GameStop’s board repeatedly changed procedures tied to the shareholder vote before issuing a proxy statement that the complaint says was misleading. The challenged issues include whether Ryan Cohen may vote the 9.3% stake he holds and how abstentions should be counted. The complaint alleges that these procedural changes were designed to reduce the voting participation rate of public investors.
GameStop shareholders were originally scheduled to vote on the compensation plan on July 7. Under the proposal, Ryan Cohen would receive $3.5 billion in stock option awards if the company reaches a $10 billion price-to-earnings ratio and $10 billion in cumulative earnings before interest, taxes, depreciation and amortization.